Another week, another ATH.
Bitcoin has been breaking record after record lately, with many traders believing that this latest climb could be different from its last spike in 2017. Back then, the leading cryptocurrency lost momentum soon after people questioned its legitimacy. Today, BTC is fueled by a less speculative fever; investors are now treating Bitcoin as an alternative asset.
There are several ways investors can include Bitcoin in their strategies. Today, on Crypto Terminology: A to Z, we’ll unpack three which, coincidentally, start with the letter I. (Whad’ya know!)
First up: Index.
Many investors see the crypto index as a cost-effective way of trading as it saves the investor the need to open positions on each individual coin. It is also often seen as a good way to spread risk. The All Crypto Index and Major Crypto Index are two of the well-known crypto market indices launched by the CMC Markets. The former provides a wider indication of how the overall cryptocurrency market is performing, while the latter tracks the largest portion of the cryptocurrency market including BTC and ETH.
In addition to asset diversification, many investors look to insurance to protect their crypto investment.
Cryptocurrencies often experience staggering price rises and vertical free falls. This volatility often spells trouble for traders caught on the wrong side of the price swings. Some traders look to crypto insurance to protect their assets.
Buying and selling isn’t the only way to profit from crypto. Profits can also come in the form of interest.
Some investors interest by lending their crypto to crypto exchanges, or by depositing their assets into a DeFi protocol. In other words, putting their crypto balance to work.